POLITICS
02/12/2018 09:02 am ET Updated Feb 12, 2018

Trump's New Infrastructure Plan Is Kind Of Underwhelming

The “big league” president goes small on infrastructure.

WASHINGTON ― President Donald Trump is unveiled his long-delayed infrastructure proposal on Monday, an initiative meant to spur investment in the nation’s crumbling roads, bridges, and waterways. However, the plan is believed to be a far cry from his populist campaign rhetoric, in which he promised to unleash a grand national renewal not seen since the days of Dwight Eisenhower.

While the plan includes a shiny topline number ― a $1.5 trillion investment in infrastructure ― the substance of the package is decidedly less than meets the eye. The proposal seeks to turn just $200 billion in direct federal spending over the next decade into nearly seven times that number by leveraging state and local tax dollars as well as private investment. The American Society of Civil Engineers, meanwhile, says the U.S. needs to invest $4.59 trillion in infrastructure by 2025.

Trump himself seems skeptical of the scheme, according to NBC News. Indeed, in private conversations with lawmakers last year, the president repeatedly criticized the plan’s core concept of using public-private partnerships to finance infrastructure projects.

The administration’s proposal would theoretically spur additional investment in infrastructure by sharply reducing federal cost-sharing for projects to no more than 20 percent of the costs, down from the traditional 80 percent. The massive reduction in federal dollars would place a greater onus on state and local officials to find revenue to fund the construction of new projects ― which in many cases would likely mean allowing more tolls or usage fees to create revenue streams to lure in private investors.

The task is especially difficult for rural communities, where fewer people are available to help spread the cost of new infrastructure. It is likewise tough to attract investors for projects not directly used by consumers, like dams and waterways. The federal government, for example, provided at least half of the funding to New York’s new Tappan Zee Bridge.

“Using federal money as an incentive for private investment in infrastructure will work well for projects that can produce revenue, including toll roads and airports,” said Kevin Heaslip, associate professor of civil and environmental engineering at Virginia Tech University. “But the return on investment for larger-scale projects, such as a road through a small town, is unclear.”

“Trump’s infrastructure plan flips the traditional capital expense funding model from 80 to 90 percent federal funding to 10 percent federal funding,” Heaslip went on. “The majority of the funding mandates get pushed to the states and private funding, with the administration taking credit for the investment.”

Democrats last week unveiled their own $1 trillion infrastructure proposal, which consists entirely of direct federal dollars. They called the administration’s plan a disappointment, and argued that the president missed an opportunity to provide a much-needed federal injection of dollars into the country’s infrastructure grid by taking advantage of tax reform. The new GOP tax law allows U.S. companies to repatriate cash they have stowed overseas ― but it uses a portion of the repatriation, not on infrastructure, but as a way to offset the cost of the tax cuts. 

“This is a fake infrastructure plan,” Rep. Peter DeFazio (D-Ore.), the ranking member of the House Committee on Transportation and Infrastructure, said last week.

Rather than creating new sources of revenue, such as calling for an increase in the federal gas tax ― which is supported by groups like the U.S. Chamber of Commerce ― White House aides have suggested that lawmakers pay for Trump’s infrastructure proposal by cutting funding from other transportation programs like Amtrak or the Highway Trust Fund. To that end, the White House on Monday released its 2019 fiscal year budget, which proposed cutting existing infrastructure programs by at least $240 billion.

Funding infrastructure by cutting other infrastructure programs in such a way would amount to a “bait and switch,” the Center on Budget and Policy Priorities warned last month.

But the prospect of slashing funding to domestic programs seems unlikely, given that Congress last week sealed a budget deal that allowed for an extra $300 billion to be spent over the next two years. The sharp increase in spending was preceded by an unpaid $1.5 trillion tax cut ― a one-two punch that is expected to usher in a new era of trillion-dollar budget deficits in Washington.

Trump is scheduled to host a bipartisan meeting of congressional leaders at the White House on Wednesday to discuss the proposal, but it’s difficult to see how it gains traction with either party. Conservatives in Congress are angry about the raft of new spending, while Democrats are leery about the prospect of cooperating with an unpopular president during an election year ― especially one who spent much of his first year in office antagonizing their base during bitter fights on health care and immigration.

One portion of the plan Trump is excited about is its rollback of regulations, reforms he says are needed in order to simplify the lengthy and expensive process of receiving federal permits to construct new infrastructure projects.

“Any bill must also streamline the permitting and approval process — getting it down to no more than two years, and perhaps even one,” Trump said last month in his State of the Union address.

But environmental and progressive groups say Trump is merely seeking to undo key environmental regulations. The administration, for example, has already sought to reverse more than 60 environmental rules, including those relating to flood building standards, bans on pesticides, methane reporting, greenhouse gases, offshore drilling, protections for wild animals, sewage treatment, fracking, and train safety, according to an analysis by The New York Times.

“With such a public record of promoting the interests of corporate polluters over communities and the environment, no one should be fooled by Trump’s infrastructure scam,” wrote Christy Goldfuss, senior vice president for energy and environment policy at the Center for American Progress. “It is little more than a Trojan horse designed to gut the environmental protections that are necessary for the clean air, clean water, wildlife, and national parks that truly make America great.”

This article has been updated to include Heaslip’s comments.

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